Introduction

On 10th of April, we participated in a seminar on Law of Conveyancing titled “

Conveyancing for Dummies” organized by our Law of Conveyancing lecturers with the help of
fellow students. The seminar was divided into three sessions, the first session being “Sharing
Session on Housebuyer’s Right and Protection Under Development Housing Act 1966 (HDA)”
which was conducted by Puan Zuriatul Mida who is a conveyancing lawyer from Messrs. Sujaihah
Mida Azmi & Co. The second session is a Forum on Current Practice of Conveyancing Procedure,
paneled by Tuan Nursyazlin Nabila, a lawyer from Messrs. Dennis Nik & Wong , Encik
Faharuddin bin Shamsuri, representing the Malayan Banking Berhad, and Datin Subkiah bt
Jamaludin, representing Jabatan Dasar Percukaian LHDN. For the last session, a talk was given
by Tuan Khairizan Azizi from Messrs.Khairizan Teo & Nuriati titled “New Perspective on
Conveyancing: Contemporary Challenges, Problems and Solution” followed by a Q&A session
with the speaker. To conclude the seminar, a roleplay competition was conducted on
“Conveyancing Hands-on Practice” followed by a Kahoot competition between participants of the
seminar. From this seminar, we gained some valuable insights on the law of conveyancing in action
as well as on practicing as a conveyancing lawyer.
To start, conveyancing can be defined as the branch of law concerned with the preparation
of documents for the conveyance of property to another party. From the seminar, we found out
that in some instances, law of conveyancing in practice can be different from the law that we learn
in class, as will be illustrated in the summarization of each session of the seminar in this report.

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 First Session

The speaker firstly mentioned on the House Developing Act 1966 and the talk given is basically
on the rights accorded by the statute. These statutes are House Developing Licensing Housing
Development (Control and Licensing) Act, 1966 (HDA) and Housing Development (Control and
Licensing) (Amendment) Act 2012. Starting off with Section 5 of HDA 1966 which are the
compulsory licensing of the developer. Section 6 is the requirement for house developer license
whereby they have to show proof that paid-up capital is at least 250k and this can be checked
through SSM search online. Next, according to the same section they are required to pay 3 percent
from the total of the construction cost which does not included the land cost. Non-license developer
may not start the housing project unless this requirement is fulfilled. The next protection is where
the house developer has to display in conspicuous manner the license number and permit to
advertise and they may be penalised if they do not display. They cannot promote or give out flyers
if they do not have the above said license.
Next, under section 11-13 of the same act states the Minister’s right to give directions to
developer if the developer if they are not able to meet duties under Section 7 of the same act.
Section 12 gives the right to the minister to revoke or suspend the license to ensure that the
developers meet their duties in section 7. The speaker also mentioned that any financier who give
bank loans to house buyers, in cases of the project flop the High Court based on decided cases held
that they would not be able to cover the loan. The requirement of the developer to maintain the
development bank account accessible by the Minister this is another protection given by the statute
to enable house buyers to claim damages in case there is defect in the construction of the house.
There are other rights as well such as the developer has to make sure that the property is free from
restriction and encumbrances. Completion date is also mentioned in the statute in Schedule G and
Schedule H. Other protection accorded by the statute is that the Memorandum of Transfer must be
registrable. The construction quality especially if it is a low cost development has to be acceptable.
A Court of Appeal case in 2019 was explained whereby a claim for defect was allowed even if it
is done outside the defect liability period. It must be noted that the defect liability period is only
for latent defects. For claims of defects liability, you cannot claim under the Schedule G and H.
However, you may claim under case law provided the defect is not covered by a warranty or an
insurance. The limitation period is 15 years. Another requirement is the defect has to be a latent

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defect and not a patent defect. The difference is these two defects are explained further whereby
latent defect is a defect that could not be seen due to workmanship or quality material used during
construction and these claims need to be proved in The Specialized Construction Court. On the
other hand, patent defects are defects that visible to the eyes like cracks on the walls, tiles that have
been installed that came off.
Next, the speaker also mentioned on the connection of water and electricity. In a decided
case, the Court held that as long as it is connected to the main housing area, it is said to be that the
developer have already met their duties.
Aside from that, HDA also provided under section 13, that the developer cannot sub the
work the works to other company, transfer their rights without prior consent from the minister or
controler. HDA is applicable to developers and also house buyers. The other parties HDA is
applicable to license and unlicensed developer. The act has 2 types of claim that can be made
which are civil claim and also criminal proceeding. A civil suit may be started during a criminal
proceeding and the mode of commencement is writ summon as it is known as trivial issues.
The other avenue to recover is through housing tribunal as said by the speaker. The case
study mentioned was Zulkifli bin Mohd Zain where the purchaser did not serve notice of
termination and the Court held that the failure to serve notice is fatal. Next, the next avenue that
was known to be costly which is the civil suit was explained by the speaker. Cases that involves
complex question of law such as claim for defects but the defect liability period has ended and this
leads to the claimant has to go to the civil court. In a case regarding latent defect, whereby the
defect was only discovered after 5 years and the client wanted to proceed at the Sessions Court.
Section 19 provides the offences committed by the developer. Among the offence is failure
to exercise duty under section 7 where a party enter into an agreement without consent from the
Minister. HDA provides ways for you to claim through the civil and criminal courts. Under
criminal courts, these are the penalty that can be imposed on them. In the act also, it provides on
the “Tribunal Tuntutan Pengguna” which is where the proceeding in the tribunal is final and you
may not appeal to the High Court except under “semakan kehakiman”. Usually, the reported cases
are rare but the reason for judgments are provided. The requirement that needs to be satisfied in
order to engage a counsel is that the question of law must be of a complex one under the tribunal.
Or else, there might be a case of prejudice.

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Second Session

The second session is a Forum on Current Practice of Conveyancing Procedure, paneled

by Tuan Nursyazlin Nabila, a lawyer from Messrs. Dennis Nik & Wong , Encik Faharuddin bin
Shamsuri, representing the Malayan Banking Berhad, and Datin Subkiah bt Jamaludin,
representing Jabatan Dasar Percukaian LHDN.

The forum started with the explanation on the exemption of the stamp duty by Datin
Subkiah as an answer to the question brought up by the moderator. She firstly mentioned that ad
voleram stamp duty on instrument of transfer of property is payable under item 32 of the First
Schedule of the Stamp Act 1949. She further elaborate that as section 80 SA 1949 empowered the
Finance Minister to reduce or exempt any payment for stamp duty, and it will be issued as an
Exemption Order, followings are the orders that are important to take note into:-

a) Stamp Duty (Exemption) (No. 6) Order 2018

This Order exempts from stamp duty any instrument of transfer executed in relation
to the purchase of one unit of residential property having a market value not
exceeding RM300,000,00 by an individual, subject to the following conditions
being fulfilled –

● the sale and purchase agreement for the purchase of the property is executed
on or after 1 January 2019 but not later than 31 December 2020;
● the individual has never owned any residential property including one
which is obtained by inheritance or gift, whether held individually or
jointly; and
● the application for exemption is supported by a statutory declaration by the
individual confirming the matters referred to in paragraph (b) above.

b) Stamp Duty (Exemption) (No.7) Order 2018

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 This Order exempts from stamp duty any instrument of transfer executed in relation
to the purchase of one unit of residential property having a market value exceeding
RM300,000.00 but is not more than RM1,000,000.00 by an individual, subject to
the following conditions being fulfilled -

● the sale and purchase agreement for the purchase of the property is executed
on or after 1 January 2019 but not later than 30 June 2019;
● the sale and purchase agreement is between the individual and a property
developer;
● the individual has never owned any residential property including one
which is obtained by inheritance or gift, whether held individually or
jointly; and
● the application for exemption is supported by a statutory declaration by the
individual confirming the matters referred to in paragraph (c) above.

It is to be noted that to qualify for the exemption under Stamp Duty (Exemption) (No.7) Order
2018, the residential property must be purchased from a property developer but this requirement
does not apply to an exemption under Stamp Duty (Exemption) (No.6) Order 2018.

Next, she also explained on the exemptions available under the Real Property Gain Tax (RPGT).
RPGT is a charge of gains arising from the disposal or sale of real property or shares in a real
property company. It includes both residential and commercial properties, estates, and empty plot
of lands.

Under the Real Property Gain Tax Act 1976, there are several exemptions provided under the Act.

Exemption 1:

The exemption once in a lifetime given to the Malaysian Citizen or permanent resident under
section 8 of the Act. Item 9 of the Third Schedule of the Act stated that an individual is entitled to

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the exemption under section 8 in respect of the disposal of one private residence only; provided
that— (a) he elects that such exemption shall apply to that private residence; (b) on such election
being made, there shall be no further exemption in respect of the disposal of any of his other private
residences; and (c) the election so made shall be in writing addressed to the Director General and
shall be irrevocable. It is advisable to utilize this once in a lifetime exemption on higher priced
properties over lower priced properties to maximize your amount of tax savings.

Exemption 2:

The exemption of equivalent to RM10,000 or 10% of the net chargeable gain (whichever is
greater). If you decide not to utilize the once in your lifetime RPGT exemption, then, you may
utilize a RPGT exemption where the sum is higher of RM 10,000 or 10% of your chargeable gain.

For example, where the chargeable gain is RM 230,000, your RPGT exemption is RM
23,000 (10% of RM 23,000) as it is higher than RM 10,000. Hence, your net chargeable gain is
RM 207,000 (RM 230,000 – RM 23,000).

Exemption 3:

The disposal of property between husband and wife, parents and children, grandparents and
grandchildren by way of gift will not attract RPGT if the disposer (including a personal
representative) is a Malaysian citizen, as the disposer shall be deemed to have received no gain
and suffered no loss on the disposal.

She also further added that for disposal of a property acquired before Jan 1, 2000, the market value
as at Jan 1, 2000 will be taken as the acquisition price for purposes of calculating the RPGT, if
any.

Next, the forum moved on with the question on the responsibility of a solicitor with regards
to the payment of stamp duty which was answered by Tuan Nursyazlin Nabila. According to her,
now in the modern days, the solicitor would rarely resort to the manual process, in which the

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solicitor shall submit all the documents to the stamp duty office personally. This is due to the
available option for online submission at the LHDN website, where a solicitor must be registered
with the LHDN to ensure the identity of the server in online transaction. The solicitor would have
to scan all the documents needed and submit them online through the LHDN website.

Another question posed by the moderator was to the representative from Malayan Banking
Berhad, Encik Faharuddin on why islamic banking is getting more popular than conventional
banking, even among non-muslims. Among the possible reasons for islamic banking gaining
traction includes that previously, a 20% discount was given to stamp duty for first time house
buyers. However, this discount is no longer being given as affirmed by Datin Subkiah. Other
factors mentioned by Encik Faharuddin is that in islamic banking, instalment to be paid will be
fixed until the full price is paid, which means that the period of loan payment can increase where
the interest rate increase.

Meanwhile, under conventional banking there is a possibility that the amount for instalment
can rise and fall as the interest rate rises and falls. He states that most people have a fixed monthly
salary and would probably prefer to budget a fixed amount for instalment every month. However,
he notes that the interest for both islamic and conventional banking would likely be at the same
rate.

Another factor is that islamic banking offers semi-flexi loans meaning a loan that comes
with a built-in facility enabling borrowers to make advance payment to lower their loan interest
without the need to make any formal request to the bank. On the other hand, conventional banking
would offer full-flexi loans that enable borrowers to make advance payment to lower their property
loan interest and withdraw the additional payments they’ve made whenever they like, without the
need for complicated procedures, or additional charges.

During the forum, students were given the opportunity to ask questions to the panelist to
further understand the topic at hand. One question was posed to Tuan Nursyazlin by a student on
the effects of one of the parties to the sale and purchase of a property pulling out from the dealing.
To answer the question, she states that it would be dependent on which stage of the dealings did

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the party pulled out. If it was done in the offer stage, pulling out would not be a problem as none
of the parties have incurred expenses or even signed the Sale and Purchase Agreement. However,
where the purchaser decide to pull out from the agreement after the Sale and Purchase Agreement
have been signed by both parties, without any reasonable cause, the 10% deposit will be waived
and cannot be returned to him. Meanwhile, if the vendor decides to pull out at this stage, the
purchaser is entitled to the 10% deposit as well as a sum for liquidated damages at another 10% of
the purchase price. She also brought up the issue of mutual termination of the Sale and Purchase
Agreement by the parties to the agreement. There will often be a clause in the Sale and Purchase
Agreement, where if the parties mutually agree to terminate the contract, both parties will refund
whatever expenses incurred back to each other.

A question was also posed to Tuan Nursyazlin on the role of solicitor as stakeholder. In
practice, usually in the event of where the vendor is unrepresented, the purchaser solicitor may
assist and attest the execution of the documents. The solicitor must make sure that a document of
notification of merely assisting the vendor is signed by the parties in order to avoid any breach of
the provision in Legal Profession Act 1976. The purchaser solicitor is then appointed as a
stakeholder to hold the money from the purchaser for the vendor as a trustee. By engaging the
stakeholder, the vendor can hand over the title deed for the purpose of registration of the transfer,
and the purchaser can safely deposited the money once the transfer is presented for registration.
The stakeholder must not commit a breach of undertaking as it is a disciplinary offence under
section 92(2)(b) of the Legal Profession Act 1976.

Lastly, all the panelist was asked to give the students any tips with regard to the practice
of conveyancing. Firstly, Datin Subkiah advised the students to be regularly updated with the
development of law of conveyancing in Malaysia, especially regarding the exemption orders, rate
of tax payable and such. Next, Tuan Nursyazlin advised the students that in order to become a
practicing conveyancing lawyer, you must be very thorough, and therefore she shared a link of
website of Practice Checklists which is intended to assist lawyers and practice support staff to
familiarize themselves with good practices in the relevant area. The use of checklists can help
minimize risks in claims-prone practice areas, particularly civil litigation and real estate

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conveyancing. The objective of the checklists is to encourage a methodical and structural process
in dealing with the relevant practice areas.

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Third Session

For the third session, the speaker is Tuan Khairizan Azizi from Messrs.Khairizan Teo &
Nuriati who talks about “New Perspective on Conveyancing: Contemporary Challenges,
Problems and Solution” . Tuan Khairizan started off with the literal overview of conveyancing.
According to him, conveyancing is generally related to a transfer of land from A to B. However,
in legal practice, the conveyancing covers the sale and purchase agreement by developer.
Conveyancing in the practice also involves legal documentation which covers conventional
Islamic banking, individual housing loan and corporate loan. He further explained that individual
loan comes in a form of housing loan meanwhile corporation loan comes in the form of business
or corporate loan documentation.

Tuan Khairizan also emphasizes on the solicitor’s duty in conveyancing. The duties that
he listed during the talk includes, acting for the vendor or purchaser in the sale and purchase
agreement. Besides, solicitor also and must act in the best interest of the client. They basically
have to represent and ensure that the terms and conditions of the sale and purchase agreement is
fair and protective towards the client. Apart from having a duty towards the client, solicitor’s duty
also involved in loan documentation whereby the solicitor has to act for the bank. Having said that,
Tuan Khairizan listed some of the prominent statutes that govern conveyancing. The statutes are
National Land Code, Stamp Act, Real Property Gains Tax, Housing Development Act, Business
Registration Act, Contracts Act, and Solicitors’ Remuneration Order Act, and many others.

Regarding the contemporary challenges, Tuan Khairizan begins with the fact that
irrespective of how long the vendor holds the property, he will still be held liable for the 5% gains
tax charged upon him but likely the exemption provided in the real property gains tax (RPGT) is
still available for those who wish to ask for exemption.

The second contemporary challenge is that as we can see, some buyers sometimes unable
and ineligible to get a loan from the bank. Thus, it is the duty of the solicitor to advise the client
before they purchase the property. Tuan Khairizan also mentioned that usually in practice, almost
all sales is subject to approval of loan hence this is a new thing practiced by the property agent.

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For sub-sales situation, the similar practice has been applied whereby the buyer have to pay 2%
subject to approval of loan. However, time frame still needs to be provided. This thing came about
because of the policy from Bank Negara which emphasizes on eligibility of the client in approving
loan. The solicitor is in a dire need to advise their clients regarding this matter. These are the two
contemporary challenges stated by Tuan Khairizan.

Next, the issue of adjudication of Form 14A or Memorandum of Transfer was also being
discussed briefly. According to Tuan Khairizan, it is the buyer’s choice as when they want to
adjudicate the form. This is because on the loan is approved or for a lease that requires state’s
consent, once the state’s consent is approved, then only the Memorandum of Transfer can be
adjudicated and so that when it comes to presentation the buyer will still have that time within 3
months to register with the Land Office or otherwise, the buyer will face the penalty. This is also
a part of the challenges, where the buyer needs to time themselves.

Tuan Kharizan then further explained that the solicitors must act diligently. This is because
under the law of torts, the solicitor can be held liable for negligence if they fail to comply with the
regulations provided in the conveyancing matters. Solicitors in this field also received the highest
level of complaints and highest disciplinary board action. These are resulted from the challenges
that have been mentioned above. The nature of the complaints commonly come from the solicitors
who overcharge and embezzlement of the property’s purchase price.

In conclusion, in order to eradicate or decrease the contemporary challenges from keep

occuring, Tuan Kharizan provides a solution where he emphasizes that the solicitors in
conveyancing must be aware of all relevant statutes and must know thoroughly the recent
development on law and regulations of conveyancing. Besides, the solicitors must also exercise an
utmost care, diligence and highest ethical value towards their clients.

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Conclusion

In conclusion, as the participants of this seminar, we have learned a lot of new things about
law of conveyancing. Now we are more aware about the house buyers’ rights and protection, about
the current practice of conveyancing procedure and we are also exposed to the contemporary
challenges in conveyancing. The roleplay performed by the students during the last session of this
seminar has helped us to know better about how the sale of property is being done and what rights
and protection owned by all parties. Through the roleplay, we also find out how law of
conveyancing and how their issues are being raised such as delay in delivery of property,
terminating the Sale and Purchase agreement and lastly the death of the purchaser and including
matters such as the usage of black ball pen in signing the agreement that is wrongly used in which
the right method was to use black ink pen. These issues were explained clearly through the
roleplays done by the students and this had helped us in understanding laws pertaining to
conveyancing. All in all we had acquired many informations that was not obtained during the usual
classes that we had and we believe that these informations would be a great help in regards to our
final examinations and also in the future as well.

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